Rob Douglas: Lessons from city pay fiasco
July 5, 2012
July 3, 2012: Steamboat Springs City Council votes down pay raises
June 20, 2012: Pay raises for employees approved by Steamboat City Council
On Tuesday, three groups exited Citizens Hall with a bad taste in their mouths after the Steamboat Springs City Council appropriately denied raises for city employees until the council can review employee compensation in the context of all city expenditures and revenue during the 2013 budget process this fall.
Employees walked away thinking the council pulled the rug out from under them by backtracking on a 4-3 June 19 vote to authorize compression raises. The council on Tuesday also pushed off on moving forward with market-rate raises.
The city management team left puzzled after City Manager Jon Roberts emphasized charts showing employee compensation outpacing sales tax revenue at an "unsustainable" rate — effectively contradicting Finance Director Kim Weber's assessment that the city could sustain employee raises by using the reserve fund to cover other city expenditures.
And the council stumbled out on shaky legs after a newly formed majority — some members having been spanked by their constituents following the June 19 vote — denied all raises despite council members Sonja Macys and Kevin Kaminski mimicking Occupy Wall Street protesters by repeatedly saying, "The reserves were built on the backs of our employees."
Tuesday's vile-tasting concoction was brewed by the June 19 majority of Walter Magill, Kenny Reisman, Sonja Macys and Kevin Kaminski that prematurely voted to authorize more than $1 million in compression raises without waiting for and considering additional employee compensation data the council requested for Tuesday's subsequent meeting. Further, by voting for the raises, that majority violated the council's 4-year-old policy of not making non-emergency appropriations outside the annual budget process.
Hopefully, the aftertaste of Tuesday's meeting will remain acrid long enough to remind the council that ill-considered, emotion-driven, untimely appropriations are counterproductive and result in more painful choices when the annual budget process rears its head every October.
The question now is whether the council can cast the damage of the last two meetings aside and turn toward enacting a 2013 budget that maintains core city functions, fairly compensates city employees and safeguards reserve funds for future years in case an economy with occasional upticks takes a nosedive. To do so, the council should move outside its comfort zone and confront the current spending paradigm that could swamp the city's coffers if left unchanged.
The incomparable generosity of Gloria Gossard affords the city with the opportunity to reduce or eliminate funds appropriated to several nonprofit organizations. By leaving millions of dollars to those nonprofits (for example, the Steamboat Springs Arts Council received more than $1 million), Gossard improved the financial wherewithal of those organizations to a level the council should consider during the budget process. Reductions in city funds to those nonprofits should not be redirected toward other nonprofits while the city is faced with using reserve funds to cover employee compensation, core city functions and critical infrastructure needs.
The council should deny any new projects that add to the maintenance costs of the city — even if the initial project is subsidized by a grant or matching funds. The cost of maintaining the dozens of existing facilities, parks and trails that the city owns already is burdening the financial health of the city.
The council should sell non-essential, city-owned buildings and assets and direct the proceeds toward critical infrastructure improvements that will be required when growth returns. In the same vein, the council should stop authorizing leases for city-owned properties at below-market rates.
The council should explore what, if any, legal steps would be needed to divert the city's accommodations tax toward the city's capital projects fund beginning in 2014. That diversion should continue until the backlog of critical infrastructure needs for the long-term viability of the city has been eliminated. Arguably, the city's capital infrastructure needs fall within the parameters of the accommodations tax ordinance. If not, the council should ask the electorate to repurpose the tax.
Since 2008, the combined efforts of the council, the management team and city employees have kept Steamboat fiscally healthy. What became apparent during the last two council meetings is that economic challenges will remain for years to come unless there is a dramatic improvement in our local economy. If the council expands the boundaries of where it seeks to reduce expenditures and increase revenue, it will be able to maintain core city functions while simultaneously addressing critical infrastructure needs and employee compensation.
Since 1998, Steamboat resident Rob Douglas has been a commentator on local, state and national politics in Washington, D.C., Maryland and Colorado. To reach Douglas, email rdouglas@SteamboatToday.com.